Preventing Abuse of Tax Treaties -Principal Purpose Test in Multilateral BEPS Agreement-

4.1. Existence of a transaction or arrangement

In the PPT provision, the terms transaction or arrangement are used. These terms are explained as follows in the 6th Action Report: The terms “arrangement” or “transaction” will be broadly interpreted. These terms include “any contract, reconciliation, plan, transaction or sequence of transactions, whether or not legally applicable”. Specifically, these terms include (1) generating, allocating, obtaining or transferring of income or wealth or right associated with the gaining of income, and (2) establishing, purchasing and maintaining a business by the person earning the income, including gaining a status as a resident of one of the

In fact, arrangement can be the correct term that matches such treaty abuse; because…